Fun With Numbers - Daily Star edition

From today's Daily Star:

TAXPAYERS have been hit doubly hard by high unemployment. Rising levels of jobless workers cost up to £100 million a week in benefit.(1) And, to process them all, the Department of Work and Pensions has taken on around 17,000 extra staff...

In 2008/09, when the recession first hit, the department paid out just over £3billion to 106,963 staff. The following year more than 13,000 new staff were taken on, with the wage bill swelling to around £3.5billion. And the latest figures we’ve uncovered show there are now around 123,390 staff at the DWP. (2) Last night campaigners called on the ?Government to reform the welfare system rather than spend on more civil servants... (3)

Latest figures show there are around 2.6 million people out of work in the UK. And last month 1,598,400 claimed jobseekers allowance totalling around £98,255,573 a week... If unemployment levels stay the same, taxpayers will be shelling out more than £5 billion a year in jobseekers allowance.(4)

Last year, around £3.3 billion was lost to fraud and error and the DWP has had to employ staff to start a new Fraud & Error Strategy which it hopes will cut the losses by around £1.4 billion in the next four years... (5)

It's just not clear what point they are trying to make, as they are mixing and matching lots of different figures and missing the bigger picture entirely.

1) It's not the "rising levels" which cost £100 million a week, because that's the total. The additional unemployment benefit we pay out because of the "recession" is obviously only a fraction of that. And 'recession' is a wildly misleading term, as it is merely the result of something else, the actual root cause, and not something that just happens out of the blue.

2) Grossing that up would give us a DWP wages bill of £3.5 billion a year, but we know from DWP's own Departmental Report that their running costs are about £9 billion a year (see page 141, pdf), which is 5p for every £1 they pay out.

3) Yup. Replace the whole lot, including the tax free personal allowance, with a Citizen's Income scheme which will cost next-to-nothing to administer. Problem is that most of the people talking about welfare reform want to implement all sorts of authoritarian nanny-knows-best type wrinkles which hugely increase the cost. And the people at the DWP have always blocked it because it would put ninety per cent of them out of work.

4) £5 billion for 1.6 million claimants works out at about £60 a week each, seems 'about right'. But... DWP's own tables show that unemployment benefit in all its guises is more like £13 billion (half of all working age benefits, let's say). But what's £13 billion? It's less than one per cent of GDP, that's what it is, or two per cent of all government spending.

5) It's far more than £3.3 billion because this does not include fraud and error in Tax Credits (administered by HM Revenue & Customs), but yippee! Make the system so complicated that we need to take on more civil servants to reduce fraud and error again!

Now, look at those figures again, running costs £9 billion, fraud and error at least £5 billion and dole actually paid out £13 billion? A bit of an imbalance there, surely? Correct, it's because DWP administers loads of other stuff besides dole money. From page 141 again, benefits actually paid out:

Working age £26 billion
Pensions £82 billion
Disability £19 billion
Housing Benefit £26 billion

The Housing Benefit figure is wildly overstated as about two-third of that is merely money shuffled from DWP to local councils to pay headline rent demanded which poorer council tenants can't afford in the first place, if they reduced headline rents even further, then two-thirds of HB would no longer show up as an expense. It's the one-third paid to 'private' landlords which does the damage.